CALLTSLAabout 1 month ago7Kviews

Tesla: demand elasticity turned out to be worse than assumed

Volume responded once and has responded less every time since.

The driver is price elasticity. Each price cut trades margin for volume, and when the volume response decays the trade becomes value-destructive rather than share-accretive. The elasticity is measurable across the price actions. Incremental volume per point of price reduction has declined with each successive round. The position: short on Tesla, entry locked at publication and the exit dated rather than open-ended. The target is stated in the call block above and the horizon with it. Sized to the catalyst rather than to conviction, with the invalidation written into the kill-switch card instead of left implicit. Regulatory approval arriving earlier than expected is the risk to any position that depends on the timeline, and approvals have surprised in both directions.

Discussion · 6

Marco BianchiJUL 31

Good piece. The cohort split is the detail that everyone leaves out. How much of this do you think is already in the buy side's numbers?

Elena PetrovaAuthorJUL 29

That is where I would push back. The macro has to be neutral rather than helpful. If it is actively hostile this does not work and nothing in the position hedges that.

Dana KatzJUL 30

This is the clearest write-up I have seen on the name. The destocking signature is textbook and nobody is naming it. Does the thesis survive a soft guide next quarter?

Yael BrennerJUL 29

I came in sceptical. The utilisation assumption is where I disagree. Where does this break if rates back up another 50bp?

Pauline VidalJUL 29

Thanks for showing the workings. The margin bridge is doing more work here than is acknowledged. How much does this depend on the macro cooperating?

Marco BianchiJUL 29

Been on the sidelines on this one. Splitting volume from price is what makes this legible. What does the bear actually have to be right about?